Bharti Airtel may enhance its market share; telecom war to heat up?

FPJ Web DeskUpdated: Thursday, September 02, 2021, 09:14 PM IST
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Bharti Airtel's fund raising is expected to strengthen its competitive positioning in the market and provide the telco with the necessary ammunition for aggressive 5G rollout, analysts said. |

Bharti Airtel and Reliance Jio has heated up with the former catching up with the latter. Today, Bharti Airtel's ARPU is 6 percent higher than that of Reliance Jio unlike three years ago, according to reports.

Bharti Airtel's fund raising is expected to strengthen its competitive positioning in the market and provide the telco with the necessary ammunition for aggressive 5G rollout, analysts said to PTI.

The capital raising announcement, though unexpected and surprising, would enable Airtel to enhance its market share and provides it wherewithal to make faster investment in a scenario India moves to a two-player market earlier than expected, some analysts felt.

Reliance Jio's stronger balance sheet, impending 5G spectrum auction and related capex may have prompted Airtel to raise funds and is seen "positively", Edelweiss said.

The fund raise by Airtel although "was not necessary" at this juncture, but it does provide Bharti with the necessary ammunition in case of aggressive 5G rollout, the report mentioned.

"Despite 3x net-debt to EBITDA, Bharti's balance sheet was well funded, considering rising EBITDA due to market share gains and FCF (free Cash flow) generation. Reliance Jio's (RJio''s) stronger balance sheet, impending 5G spectrum auction and related capex may have prompted Bharti to raise funds and we see it positively," Edelweiss said in its report.

While the capital increase announcement was a "surprise", it strengthens the company's balance sheet and provides good buffer to make accelerated investment in a scenario India transitions to a two-player market, Credit Suisse said in its note

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